USD/CAD loses recovery momentum near 1.2700 ahead of Canada GDP data
- USD/CAD edged higher toward 1.2700 following Monday's sharp decline.
- US Dollar Index stays in the positive territory above 91.00.
- Investors await Gross Domestic Product data from Canada.
The USD/CAD pair closed the first day of the week in the negative territory but regained its traction ahead of key macroeconomic data releases on Tuesday. Although the pair seems to have lost some momentum after climbing to a daily high of 1.2699, it stays in the positive territory, rising 0.15% at 1.2664.
USD preserves its strength
The US Dollar Index (DXY) posted modest daily gains on Monday as the rising US Treasury bond yields helped the greenback stay resilient against its rivals. With the market mood turning cautious, the DXY continues to push higher and was last seen gaining 0.17% at 91.20. Reflecting the sour sentiment, the S&P 500 Futures are down 0.42% on the day.
On the other hand, the barrel of West Texas Intermediate (WTI) is up nearly 1% at $60.80 on Tuesday, helping the commodity-sensitive loonie limit its losses.
Later in the session, Statistics Canada will release the December and fourth-quarter Gross Domestic Product (GDP) growth figures. The market consensus points to an expansion of 0.3% on a monthly basis in December and a stronger-than-expected reading could provide a boost to CAD and weigh on USD/CAD.
The US economic docket will feature the ISM-NY Business Conditions Index and the IBD/TIPP Economic Optimism Index.
Technical levels to watch for
Author
Eren Sengezer
FXStreet
As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.
